I’ve always admired U.S. Bancorp’s success with in-store banking. Nationally, they rank number one in total number of in-store (supermarket) branches with about 730, typically adding 40-50 per year.
But it’s not just grocery store banking. They’ve extended the concept to university campuses, hospitals, and corporate office complexes. U.S. Bank has about 60 university and workplace branches, adding 10-15 annually.
Here’s the key: these small footprint branches only cost 20-25% of the cost of a traditional branch but generate 30-40% of the income, and are sales leaders when it comes to new account opening.
While Bank of America and others have backed away from this strategy, U.S. Bank embraces it. Why have they been successful? Chuck Stroup, U.S. Bank’s EVP responsible for the in-store channel explained in a recent Chicago Tribune article:
- They manage in-store separately from stand-alone, traditional branches. “Our mantra is it’s 50% the same as traditional branch banking and 50% different”.
- They leverage their host partner’s knowledge – not just traffic patterns, but also demographics and purchase propensity during different day-parts. “We employ different marketing tactics, offer different promotions, pricingwise, from what traditional branches do.”
- They hire differently, looking for individuals with retail experience, then teach them about banking.
As consumers write fewer checks, and teller transactions in traditional branches continue to decline, we believe U.S. Bank’s experience in non-traditional branches will give it a competitive edge, enabling it to – expand distribution while at the same time reducing overall cost.